Discovery Air is a Tier One sponsor of the Discovery Air Hawk One Project – Celebrating 100 years of powered flight in Canada! To learn more, please visit www.hawkone.ca.
Headquartered in Yellowknife, Northwest Territories, Great Slave Helicopters and its group of companies is one of the largest helicopter operators in Canada.
Discovery Mining Services is a mining service and expediting company serving the needs of companies operating throughout Canada.
Air Tindi operates a diversified fleet of fixed-wing aircraft and offers air ambulance, tourism, cargo transport, charter flying and scheduled service across Canada’s north.
Discovery Air Defence Services is the prime supplier of Airborne Training services to the Canadian Army, Navy and Air Force.
Discovery Air Inc.’s Class A common voting shares and unsecured debentures trade on the Toronto Stock Exchange (symbols DA.A and DA.DB.A, respectively).
Discovery Air Technical Services (DATS) is a Transport Canada Approved Maintenance Organization (AMO 23-10) with a wide range of capabilities. We are authorized to perform maintenance and modifications on all U.S. registered aircraft as listed in the U.S./Canada bilateral agreement (Ref. CFR 43.17) and under EASA 145 (European Aviation Safety Agency).
Discovery Air Inc. (TSX: DA.A, DA.DB.A) announces strong results for the quarter ended April 30, 2012
First Quarter Financial Highlights
- Revenues increased by 42% to $52.9 million, compared to $37.2 million in the same quarter last year;
- EBITDA* increased by 78% to $8.9 million, compared to $5.0 million in the same quarter last year. On a trailing twelve month basis, EBITDA increased by 9% to approximately $48.2 million compared to $44.4 million in the trailing twelve months at April 30, 2011.
- Net profit attributable to the shareholders of Discovery Air Inc. (the “Corporation”) for the current quarter was $1.4 million or $0.09 per share ($0.09 diluted) compared to net loss of $2.6 million or $(0.19) per share ($(0.19) diluted) for the same period last year.
- The current quarter profit includes a tax-effected gain related to the extinguishment of debt and the change in the fair value Corporation’s embedded derivatives, which was also extinguished in the quarter. Excluding for these items, the adjusted loss* in the current quarter was $0.8 million, representing a 69% reduction in loss compared to the same quarter last year.
- The Corporation continued to restructure its balance sheet to extend its debt maturities at a lower cost of capital. (See details below.)
“We started the year off strong with our highest first quarter revenues and EBITDA to date, and as we enter into our traditional peak season we are optimistic that we will be able to sustain the first quarter momentum”, said Dave Jennings, President and CEO of Discovery Air Inc. “Our decisions in the fourth quarter last year to maintain and deploy resources, especially in our northern operations, to establish future revenue streams has paid off in the current quarter, and we continue to remain focused on growing our existing lines of services coupled with the incremental contribution from our Chilean operations acquired in February and Northern Air Support acquired in May.”
Additional Financial Highlights
Effective February 1, 2012, the Corporation changed its segment reporting from Northern Services and Government Services to Aviation and Corporate Support and Other. The Aviation segment includes Top Aces Inc. (“Top Aces”), Air Tindi Ltd. (“Air Tindi”), Great Slave Helicopters Ltd. (“Great Slave”) and Discovery Air Fire Services Inc. (“Fire Services”). The Corporate Support and Other segment includes Discovery Mining Services Inc., (“Discovery Mining”), Discovery Air Technical Services Inc. (“Technical Services”) and Discovery Air Innovations (“Innovations”) and Corporate.
The Corporation’s consolidated revenues were $52.9 million for the quarter ended April 30, 2012 (“Q1/13”) compared to $37.2 million for the quarter ended April 30, 2011 (“Q1/12”). The increase in revenues were largely attributable to increased demand for services provided by the Aviation segment, which generated revenues of $47.7 million in Q1/13 compared to $33.2 million in Q1/12, a 44% increase. The Aviation segment saw increased flight hour demand by the Canadian military for air combat training and special mission services, increased activity from the oil and gas-based customers, and the inclusion of revenues from Great Slave’s Chilean operation, which was acquired on February 2, 2012. The Aviation Support segment accounted for $5.3 million of total consolidated revenues in Q1/13 compared to $4.0 million in Q1/12, with the increase attributable to additional demand for Discovery Mining’s logistics and camp services by the mining exploration customer base in northern Canada.
Q1/13 EBITDA was $8.9 million compared to Q1/12 EBITDA of $5.0 million, an 78% increase. EBITDA margin was 17% in Q1/13 compared to 13% in Q1/12. The increase in EBITDA and EBITDA margin were attributable to increased revenue coupled with lower operating expenses increase as a percentage of revenue.
Following the successful set up of the Peruvian operation, the Corporation expanded its South American revenue base by acquiring a Chilean helicopter operation. On February 2, 2012, the Corporation, through Great Slave, purchased 100% of Helicopers.cl SpA (formerly, Servicios Aèreos Helicopters.cl Ltda.) (“SAL”) in Chile. SAL is a good strategic fit with Great Slave’s South American operations, providing helicopter services to domestic and multinational customers in Chile’s mining, power construction, and forestry sectors. SAL has two main operating bases in central and southern Chile, and operates a fleet of up to 10 intermediate and medium sized helicopters. The purchase price consisted of cash consideration of $2.5 million and contingent consideration ranging between $1.5 million and $4.5 million, payable in two installments on December 31, 2012 and on December 31, 2013. The Corporation estimates that the total purchase price will be $7 million.
On February 20, 2012, the Corporation entered into an asset purchase agreement to acquire the assets of Northern Air Support Ltd. (“NAS”) for $9.4 million. NAS is a helicopter charter company serving the Canadian mining, forestry and oil and gas seismic sectors with bases in Kelowna, British Columbia and Rocky Mountain House, Alberta. This acquisition was completed on May 2, 2012.
On March 26, 2012, the Corporation obtained new financing of $34.4 million, comprised of five new term loans totaling $29.9 million with a combined average interest rate of 5.2% at the time of close, and a 91-day $4.5 million bridge loan from a related party with an interest rate of 9.5%. The term loans mature in March 2017 and the bridge loan matures in June 2012. The new financing was primarily used to repay the $34 million term loan which was scheduled to mature in February 2013 and future draws will fund the purchase of additional aircraft.
Selected Financial Information
The unaudited interim condensed consolidated financial statements for Q1/13, including required comparative information, have been prepared in accordance with IFRS.
The table below summarizes selected financial information for the current and comparative periods:
* References to “EBITDA” are to net profit (loss) before finance costs, income taxes, depreciation of property and equipment and intangible assets, gains and losses on disposal of assets and extinguishment of debt, and gains and losses resulting from the change in fair value of financial liabilities. “EBITDAR” is EBITDA before aircraft lease cost. Beginning in Q1/13, the Corporation changed the definition of EBITDA and EBITDAR to exclude gains and losses on disposal of property. EBITDA and EBITDAR for prior periods are restated to reflect this change in their composition. The EBITDA margin is EBITDA as a percentage of revenue. Management believes EBITDA and EBITDAR to be important measures as they exclude the effects of items which primarily reflect the impact of long-term investment decisions from the results of the Corporation’s day-to-day operations. Management believes these measurements are useful in assessing the Corporation’s ability to service debt and to meet other payment obligations, and as a basis for valuation. “Adjusted profit (loss)” is net profit (loss) attributable to shareholders of Discovery Air excluding non-cash gain on extinguishment of debt and gains and losses resulting from the change in fair value of financial liabilities.FORWARD-LOOKING STATEMENTS
Forward-looking information and statements are included in this earnings release. Please refer to the statement regarding forward-looking statements contained in the Corporation’s Management’s Discussion and Analysis for Fiscal 2012 and for Q1/13 which are incorporated herein by reference. Those statements provide an explanation as to what forward-looking statements are, and the specific factors, uncertainties and potential events that the Corporation has identified for the attention of readers. When relying on forward-looking information and statements to make decisions, investors and others should carefully consider these factors and other uncertainties and potential events.The Corporation’s unaudited interim condensed consolidated financial statements and Management's Discussion and Analysis for Q1/13 have been filed concurrently and are available on the Corporation’s website at www.discoveryair.com and on SEDAR at www.sedar.com. The reader is encouraged to review the unaudited financial statements and Management's Discussion and Analysis for the quarter ended April 30, 2012 for more complete disclosure on the Corporation’s financial condition and results of operations.
The Corporation’s Class A common voting shares and unsecured convertible debentures trade on the Toronto Stock Exchange under the symbols DA.A and DA.DB.A, respectively.
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Both Great Slave Helicopters and Air Tindi are co-sponsors of the Government of the Northwest Territories Aviation Bursary Program that provides eight $5,000 scholarships to young Northerners looking to pursue a career in aviation within the NWT industry each year.
If you would like to concentrate on flying aircraft while knowing you are in the safest hands around, our team of maintainers will take care of all aspects of managing your fleet.
Discovery Air Fire Services operates with four divisions
Discovery Air Fire Services has been active in the aviation industry for over 60 years and is organized into four operating divisions; Fire, Charter, Imagery and Training.Read More
Discovery Air International was established to expand Discovery Air’s range of specialty aviation services domestically and internationally and will focus initially on executive charter, medevac and repatriation services out of Western Canada with its primary base and main operations based out of Calgary, Alberta.
The Northlinx Network brings together many of the Great Slave Helicopters Aboriginal Joint-Venture Partnerships allowing all participants to benefit from pan-territorial mega-projects requiring helicopter services in the North. Presently there are twelve partnerships operating in this profitable model around the NWT and Nunavut. On top of that, Air Tindi has an additional four Aboriginal partnerships and Discovery Mining Services has two.
We are committed to providing our customers with specialty aviation solutions whenever and wherever they are required. Our pilots, maintainers, logisticians and administrators operate with precision and pride in some of the most challenging environments in the world.
Discovery Air is committed to recruiting and retaining the best talent in aviation industry. By joining Discovery Air you will have the opportunity to participate in a unique and dynamic environment focused on growth, entrepreneurship, innovation and teamwork.
Discovery Aviation Academy is a flight school based in Sudbury, Ontario that offers many different types of pilot flight training to meet the needs of all aspiring aviators.